White House Pledges Crackdown on Online Counterfeits

Tuesday Dec 14th 2010 by Kenneth Corbin

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Senior administration officials talk tough about the illegal trafficking of online goods, zeroing in on health risks such as knock-off pharmaceuticals.

Senior Obama administration officials vowed on Tuesday to step up their efforts to combat the trafficking of fake goods, taking particular aim at the online flow of counterfeit pharmaceuticals and other potential health hazards.

Speaking this morning at a White House forum, U.S. Intellectual Property Enforcement Coordinator Victoria Espinel announced the formation of a nonprofit organization that includes some of the biggest companies in the tech and financial sectors aimed at stamping out the illicit trafficking of knockoff drugs.

The group draws support from Web gateways like Google and Microsoft, domain leader GoDaddy, as well as payment services firms Visa and MasterCard. The companies have pledged to partner with the administration and federal law enforcement agencies to put websites that deal in counterfeit goods out of business.

Espinel spoke of the acute risks posed by discount online pharmacies that pedal imitation drugs for HIV, cancer and other diseases, a multi-billion dollar business.

"And this is just the tip of the iceberg," she said, detailing other health hazards that can stem from the counterfeit trade, such as exploding batteries or toothpastes containing poisonous chemicals.

One of the functions of the new organization will be to establish and maintain a registry of legitimate online pharmacies, aiming to establish a compliance and oversight mechanism to weed out the bad actors.

"One of the things we are working on is making sure that we have data that is as accurate and comprehensive as possible," Espinel said.

Espinel was joined this morning by other senior administration officials, including Attorney General Eric Holder, who emphasized the financial toll websites pedaling knockoff drugs and other products take on legitimate U.S. businesses, in addition to the health hazards.

"These crimes, like other thefts of intellectual property, have serious economic consequences as well," Holder said. "Trafficking in counterfeits is not victimless."

Holder billed that the new administration-backed coalition as an extension of the reinvigorated efforts at Justice to curb intellectual property crimes. For example, the Monday after Thanksgiving, known as Cyber Monday due to its brisk online spending, the Justice Department announced federal court orders to seize 82 domain names trading in counterfeit merchandise and pirated content.

"Put simply, the Justice Department commitment and my own commitment to combating IP crimes has never been stronger," Holder said.